World Bank Flash: Turn Down the Heat - Why Tackling Climate Change Matters for Development

“Lack of action on climate change threatens to make the world our children inherit a completely different world than we are living in today. Climate change is one of the single biggest challenges facing development, and we need to assume the moral responsibility to take action on behalf of future generations, especially the poorest.” World Bank President Jim Yong Kim, November 19, 2012

BACKGROUND

Turn Down the Heat, a snapshot of the latest climate science prepared for the World Bank by the Potsdam Institute for Climate Impact Research and Climate Analytics, says we are on a path to a 4 degree Celsius (7.2°Fahrenheit) warmer world by the end of this century under current greenhouse gas emissions pledges. Consequences could be devastating:

the flooding of coastal cities

increasing risks for food production, potentially leading to higher under and malnutrition rates

many dry regions becoming dryer, wet regions wetter

unprecedented heat waves in many regions, especially in the tropics

substantially exacerbated water scarcity in many regions

increased intensity of tropical cyclones

irreversible loss of biodiversity, including coral reef systems.

While all regions of the world would suffer – some more than others –the poor will suffer the most. The report notes, however, that a 4°C warmer world is not inevitable and that with sustained policy action warming can still be held below 2°C (3.6°F)

HOW WE ARE HELPING

The World Bank believes that a 4 degree Celsius warmer world can, and must be, avoided. The problem of climate change needs to be tackled more aggressively and requires a response that puts the world on a new path to climate smart development and shared prosperity. Greater adaptation and mitigation efforts are essential and solutions exist.

The World Bank isn’t waiting. At their request, the World Bank is helping 130 countries take action on climate change: from replacing 45 million inefficient light bulbs in Mexico, to providing solar energy for 1.4 million homes in Bangladesh, to supporting 7.8 million rural inhabitants in Ethiopia through safety nets in response to droughts. Last year, all Bank Country Assistance/ Partnership Strategies addressed climate resilience.

The World Bank works with countries to assess and manage risks from climate change and provides analytical guidance:

The Pilot Program for Climate Resilience, a dedicated fund of almost US $1 billion under the Climate Investment Funds (CIFs) prioritizing vulnerable least–developed countries, provides grants and near zero interest concessional loans to 17 countries for a range of activities to adapt to climate change: improving agricultural practices and food security, building climate-resilient housing, and improving weather data monitoring.

Recent work helps policy-makers deal with additional uncertainty that is created by climate change. For example, pilot studies are underway on flood risks in Ho Chi Minh City, Vietnam and on how to make infrastructure like irrigation systems and hydropower resilient to changes in climate in Africa.

To act effectively on climate change, many sources of funding are needed and innovation is necessary to fill the large financing gap: Providing financing for climate change is a priority for us.

In 2012, the World Bank lent $7.1 billion in support of actions to mitigate climate change and $4.6 billion for adaptation. Our adaptation lending doubled from 2011 to 2012. The CIFs have $7.2 billion pledged for 48 countries, leveraging $43 billion in investment from other sources to increase investments in clean energy, and adaptation especially for low income countries. For example, enabled by the CIFs, Algeria, Jordan, Morocco, and Tunisia are developing a 1 gigawatt Concentrated Solar Power plant which, once completed, will be the largest CSP plant in the world and is expected to drive down costs of solar technology. And we are working through markets: as pioneers of Carbon Finance, we have raised $3 billion through 13 funds and facilities operating in 70 countries since 2000.

We have issued over $ 3.3 billion in Green Bonds through 17 currencies. Green Bonds provide an opportunity to invest in projects that address climate change while giving good return on investment and benefiting from AAA ratings.

The World Bank has made a clear choice in favor of supporting developing and emerging market countries investing in renewable energy and energy efficiency.

In 2012, the World Bank Group approved a total of $3.6 billion in financing for renewable energy, a record 44% share of its annual energy lending of $8.2 billion. The energy efficiency portfolio rose from $3.0 billion over 2006-08 to $5.0 billion in 2009-11. The World Bank Group is closely involved in the Sustainable Energy for All initiative.

Our work on Climate Smart Agriculture focuses on a triple-win: carbon sequestration, food security and climate resilient livelihoods. The Bank is assisting cities to help build climate resilience and reduce greenhouse gas emissions.